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Energy Subsidies in China

The GSI’s program of work in China undertakes research and policy engagement on subsidies for fuel consumers, fuel producers and renewable energy.


  • Reduce expenditure on fossil fuel subsidies that promote unsustainable environmental and social impacts
  • Reform subsidies to level the playing field for clean energy
  • Improve the fair social distribution of subsidy expenditure

In carrying forward this work, the Global Subsidies Initiative has collaborated with a number of organizations, including the Energy Research Institute (ERI), China National Renewable Energy Centre (CNREC) and the Energy Foundation China (EF China).

FAQ: China

China is the world’s most populous country and in 2016, the world’s #1 in coal consumption and production; # 2 in the consumption and production of oil products; and #3 in natural gas consumption. Energy is a key issue in China’s policies, and government support has played an important role steering the development of the energy sector. China is determined to shift to a low-carbon economy: the country has committed to reach the peak of GHG emissions around 2030 and  “to phase out inefficient fossil fuel subsidies” as both a G-20 and APEC member.

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Media Coverage: Chinese Coal Miners Will Need 2.3 Million New Jobs by 2020: Cutbacks in Mines

Between 2008 and 2010 the government identified 69 “resource depleted cities” of which 19 – more than one quarter – are in the northeastern provinces of Jilin, Liaoning and Heilongjiang. Once the heart of China’s heavy industry, the country’s northeast is in trouble; its oil fields and steel mills are struggling, and its coal mining sector is in chronic decline.

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Reports: At the Crossroads: Balancing the financial and social costs of coal transition in China

The boom and eventual bust of resource-dependent regions has played out across the world many times over the last 50 years. As extractive industries go into decline due to resource exhaustion, competition from elsewhere or changing consumption of energy, demands are made for subsidies to revive the industry and maintain jobs. Concurrently, policy-makers, realizing that the decline of a resource extraction industry will cause social and economic hardship, begin the search for new industries to replace lost jobs and maintain economic development.

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Media Coverage: Clearing the air in India and China

Poor air quality has become a major political concern in both countries. In the 1990s, India had some success in improving air quality in Delhi through higher emissions standards for vehicles. But in the 21st century, air quality in India nationwide has continued to deteriorate, and some reports now suggest that it is discernibly worse than in China.

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Reports: Wind Power in China: A cautionary tale

Over the last 10 years, China has seen an unprecedented deployment of wind power, with capacity growing from 1.26 gigawatts (GW) in 2005 to 91.4 GW at the end of 2013. This report takes a closer look at the drivers behind the impressive wind power development in China in order to understand the complex connection between the policy goals, policy measures and development impact. In particular, it considers two related issues that have been encountered—curtailment of generation and delays in connection of projects—and how these are being addressed. The report aims to identify the lessons to be learned to inform future policy measures in China and elsewhere.

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Reports: Stories of Coal Phase-Out: Lessons learned for China

This report offers a summary of several countries’ experiences implementing energy policy shifts in an area of particular interest to China: the transition away from coal to cleaner fuels and a low-carbon economy. Using IISD’s “window of opportunity” framework, these case studies are analyzed in terms of the four critical elements of success: context, champions, concerns and complementary policies. In the second part of the briefing note, we apply the same framework to China’s own experiences in phasing out coal around Beijing. The briefing note aims to assist policy-makers, the expert community, media and all others interested in the lessons learned that countries can exchange and benefit from international experience, including within the G20 and UNFCCC processes.

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